1. automotive and vehicles

SAMPLE
Achieving Excellence in Customer Service:
The Brands That Deliver What U.S. Consumers Want
A Special Report by
J.D. Power and Associates
February 2011
A Global Marketing Information Company | businesscenter.jdpower.com
Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
J.D. Power 2011 Customer Service Champions . . . . . . . . 3
The Drivers of Excellence—
the J.D. Power 5 Ps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Changing Business Environment—
Impacts on the Drivers of Excellence . . . . . . . . . . . . . . . . 8
What Customer Service Champions
Do to Be Leaders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Social Media: A Company’s Best (or Worst) Friend . . . . . 20
Advice from Industry Experts . . . . . . . . . . . . . . . . . . . . . 26
Service Excellence and the Bottom Line . . . . . . . . . . . . . 34
A Final Look—and Your Call to Action . . . . . . . . . . . . . . . 40
The Buck Stops in the Executive Suite—
Interviews with Customer Service Champions . . . . . . . . 42
Appendix: Objectives and Detailed Methodology . . . . . . 48
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Data Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Contributing Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
J.D. Power and Associates Global Offices . . . . . . . . . . . . 57
Copyright © 2011 by J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
The information contained herein has been obtained by J.D. Power and Associates from sources believed to be reliable. However, because of the
possibility of human or mechanical error by these sources, J.D. Power and Associates does not guarantee the accuracy, adequacy, or completeness of
any information and is not responsible for any errors or omissions or for the results obtained from use of such information. J.D. Power travel industry
customer satisfaction studies (hotel, rental car, airline, and airport) were included in this special report. These studies include some responses from
Canadian consumers.
This material is the property of J.D. Power and Associates or is licensed to J.D. Power and Associates. This material may only be reproduced,
transmitted, excerpted, distributed, or commingled with other information, with the express written permission of J.D. Power and Associates. The user
of this material shall not edit, modify, or alter any portion. Requests for use may be submitted to information@jdpa.com. Any material quoted from this
publication must be attributed to “Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want,” published by
J.D. Power and Associates, © 2011 by J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.” Advertising claims cannot be
based on information published in this report.
$495
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
February 2011
Introduction
Congratulations. The mere fact that you’re reading this report indicates that you’ve survived
the deepest period of economic contraction and uncertainty in any of our lifetimes. The
near collapse of the U.S. financial, housing, and automotive markets impacted nearly every
industry and every consumer. Although the Federal Reserve Board has announced that the
“Great Recession” is over and we are now in the process of recovery, we’re not yet out of
the woods. Persistently high rates of unemployment and the looming possibility of a doubledip recession are keeping businesses and individual consumers tightfisted with their cash.
Yet, despite this period of record-level uncertainty, some companies have successfully
weathered this storm. These companies have built and supported a business strategy of
delivering service excellence. They recognize that a reputation for high-quality service is
a powerful market differentiator in the face of changing economic conditions that have
resulted in companies becoming more efficient than ever before.
Despite this period of
record-level uncertainty,
some companies have
successfully weathered
this storm. They recognize
that a reputation for highquality service is a powerful
market differentiator in the
face of changing economic
conditions.
Consumers have also tightened their belts, bringing a heightened level of scrutiny to each
and every purchase they make. During this time of increased automation, standardization,
and globalization of supply chains, competition is fierce. Companies can more easily
duplicate products from anywhere around the globe, making it ever more difficult to gain
and maintain a competitive advantage based on product differentiation alone. Contrary to
what some may think, this era of technological innovation has made service delivery more
important to your customers, not less.
Asking, Watching, Listening
During the past year, we’ve surveyed more than 35 million consumers across 60 countries
in 28 different languages. For this report, “Achieving Excellence in Customer Service—
Brands That Deliver What U.S. Consumers Want,” we analyzed the feedback from hundreds
of thousands of U.S. consumers who do business with more than 800 different companies.
By looking across dozens of industries, we’ve identified 40 companies that stand out from
all the rest.
In this report, we’ll demonstrate the impact of service excellence on several key
performance metrics. The data shows that companies that are champions in service delivery
enjoy higher rates of customer retention, reduced costs to acquire new customers, and
distinct pricing advantages when compared to companies with service delivery performance
at or below industry norms.
© 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
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February 2011
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
How Good is Good Enough?
Measurable increases in product quality over the past decade have left customers expecting
similar levels of perfection from service providers. Simply put, your customers expect you to
have it all: the right people, the right presentation, the right price, the right product, and the
right process. The companies identified in this report stand out because they consistently
deliver excellence. They’ve set the bar that you’re now expected to exceed.
Understanding how top performers achieve excellence is the first step to becoming a
Customer Service Champion. The rest is up to you.
Gary Tucker
Senior Vice President
Global Services and Emerging Industries Division
J.D. Power and Associates
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© 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
February 2011
J.D. Power
2011 Customer Service Champions
The brands we’ve recognized as the 2011 Customer Service Champions represent a variety
of different industries, from financial services to utilities. While many of these are wellknown national brands, others are less well-known regional brands. Yet, all have one thing in
common: they do more than deliver on their customers’ expectations—they exceed those
expectations and, in the process, raise the bar for their competition.
Financial
Services
Insurance
Good Neigh- • Amica
bor Phar• Automacy
• United
owners
Community • HealthMart • Erie
Bank
Pharmacy
• NJ Mfgr
• Kaiser
Permanente • Tenn Farm
Bureau
• Publix
• USAA
• VA Mailorder
•
Quicken
Loans
Healthcare:
Pharmacy
•
•
Wegman’s
•
Winn-Dixie
VA Mail-Order Pharmacy
Retail
•
Bass
ProShop
•
Cabela’s
•
Caribou
Coffee
•
Eddie Bauer
•
Zappos
Products
•
Cadillac
•
Jaguar
•
Lincoln
•
M/B
•
Shea Homes
Telecom
•
SprintNextel
•
TDS Telecom
•
T-Mobile
•
US Cellular
•
WOW
Telecom
Travel
•
Enterprise
Utilities
•
Clark
Four Season • Northwest
Natural
• Ind Int’l
•
•
JetBlue
•
Southwest
•
Ritz Carlton
Indianapolis
• International
Westjet
Airport
P O W E R E D b y S E R V I C E™
Figure 1
Customer Expectations: The Changing Landscape
The past decade has presented unprecedented turmoil and change. Global conflicts, wars,
and the near collapse of the financial, housing, and automotive industries have made an
indelible mark on both businesses and consumers. While these events have contributed to
negative economic conditions that have left everyone reeling, the decade has also offered
some exciting advances.
© 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
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February 2011
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
For instance, it’s not hard to see the explosion in information technology. More than 90% of
U.S. consumers are now online, and many now access the Internet through mobile devices.
Social media, online chat, and other real-time communication channels have fundamentally
changed the way customers shop, purchase, and communicate about products and
services.
But how do these changes impact customers’ experiences with the products and services
they buy and use? How has customer satisfaction changed?
To answer these questions, we examined five critical components of service delivery—
features that are important to consumers and how companies perform on these features.
Five critical-to-customer
features, or the
J.D. Power 5 Ps,SM are key
to achieving excellence
in customer satisfaction
The Drivers of Excellence—the J.D. Power 5 Ps
Five critical-to-customer features, or the J.D. Power 5 Ps,SM are key to achieving excellence
in customer satisfaction and advocacy. Companies, regardless of the industry, must
outperform their competition on some or all of the core areas in order to retain and attract
customers.
and advocacy. Companies,
regardless of the industry,
must outperform their
competition on some or all
of the core areas in order to
retain and attract customers.
Source: J.D. Power and Associates Figure 2
People
It takes more than just nice people to make a company stand out from its competitors.
That doesn’t mean your company shouldn’t train your people to be pleasant and courteous,
but the highest-performing companies go well beyond that. Having good people means
that, in addition to being pleasant, they are encouraged and empowered to help solve
customers’ problems. Leading companies such as The Ritz-Carlton and Four Seasons Hotels
and Resorts depend on their people to be problem-solvers for their guests, not just friendly
faces.
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© 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
February 2011
Another attribute that often distinguishes the best from the rest is the ability to
communicate proactively, not just reactively. Representatives from companies such as Shea
Homes, Amica Mutual, and Auto-Owners Insurance deliver service excellence through
simple, yet powerful acts, such as giving advance notice of a close date or providing a
heads-up on a change in the way the customer statement will look next month.
Presentation
It is well known that customers have a tremendous number of choices, and that
differentiating your company based on product alone is difficult. In addition, customers place
increased importance on how you present your company and your products or services.
There is little question that many brands leverage excellent facilities as part of their go-tomarket strategy. However, true success with customers goes beyond simply having a nice
facility. Among pharmacies, highest performers such as Good Neighbor and Health Mart
build value into their facilities by providing customers with thoughtful touches, such as a
private meeting room for consultations with the pharmacist.
The Caribou Coffee company and Zappos enhance their products through effective
packaging and merchandising efforts—Caribou Coffee’s presentations are offline, while
Zappos’ are focused on their website.
Price
One might assume that offering low prices is the only way to differentiate a product or
service. Some of this year’s Customer Service Champions offer great prices: customers
of Kaiser Permanente, USAA, and the Veteran’s Administration’s mail-order pharmacy
genuinely appreciate the low prices they are offered, according to J.D. Power data. But
price is considerably more nuanced than simply having low prices, and many of this year’s
Champions that go beyond that know this.
For example, Tennessee Farm Bureau Insurance and New Jersey Manufacturer’s Insurance
strive to go beyond low price by working to keep premium increases to a minimum.
Wegman’s Pharmacy proactively provides customers with price information on lower-cost
generic alternatives (which also speaks to the best practice of proactive communication
discussed below).
Consider also the automotive brands that excel in the Price metric. Luxury brands Lincoln
and Cadillac have recast the pricing discussion by focusing on the value they provide, rather
than their pricing.
Product
Product can be an amorphous concept when applied to any cross-comparison analysis of
the product and service industries. As noted earlier, the highest performers in this area
excel in delivering a consistent, trouble-free product, regardless of the industry, yet the
nature of that delivery can vary widely.
For example, among hoteliers, product distinction is often related to the accommodations
themselves. The Ritz-Carlton’s overall property décor and hotel grounds are benchmarks, but
this brand further differentiates their product offerings by providing thoughtful conveniences,
© 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
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February 2011
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
such as a variety of in-room amenities and comfort control options. By comparison, Four
Seasons Hotels and Resorts focuses on high-quality restaurants and guest rooms.
Insurance and financial services providers have very different products from hotels and
thus differentiate themselves in other unique ways. Quicken Loans, lauded by customers
for providing loan close dates well in advance of closing, lives up to that promise by
actually closing on the indicated date more frequently than any other lender J.D. Power and
Associates measured in the 2010 Primary Mortgage Origination Satisfaction Study. Amica
Mutual supports its claim product by making sure customers are fully debriefed and that
details are clearly explained during their claims process.
Interestingly, some of the standouts for product among this year’s Customer Service
Champions are pharmacies, rather than traditional product companies. Pharmacy is one
of the highest-scoring industries that J.D. Power measures and is unusual in one crucial
way: the overwhelming majority of transactions include subsidies from customers’ health
insurance plans—so the value of the products and services delivered is high relative to the
out-of-pocket cost to customers. This unique characteristic likely gives pharmacies (and
companies like them) a leg up when it comes to product delivery.
Process
The lives of today’s customers are complicated and time-driven. As a consequence, they
prefer companies that can offer them easy, effective, and fast interactions. The highestperforming companies deliver against this in a variety of ways.
For example, this year’s healthcare and insurance industry Customer Service Champions
receive very high ratings from customers for speed, whether it be for short wait times, fast
problem resolution, or easy-and-fast ordering systems—and it goes beyond speed.
Other Process-oriented best practices employed by the highest-performing companies
include Zappos’ product delivery and return policies; the Veteran’s Administration’s mail-order
pharmacy process of providing written notice of possible side effects; and USAA and Amica
Mutual’s use of combined statements for multiple policies.
It’s also worth noting that some sectors provide a more fertile ground for honing their
Process than others. All of this year’s Customer Service Champions in the healthcare
industry are pharmacies. Some of the pharmacy industry’s strengths in Process can be
attributed to various easy-to-use fulfillment channels. For example the patient’s physician
can enter a prescription into the pharmacy’s order system and the prescription can be
picked up at the pharmacy. Additionally, refills can be set up automatically so that the
customer does not have to remember to arrange for it. These examples reflect effective
ways companies have met their customers’ need for an easy and fast process by which to
receive service and product.
A Closer Look at the Customer Service Champions
Although all 40 of the 2011 Customer Service Champions are exceptional, some brands
stand out even in this elite group. To better understand the specific ways in which these
companies excel within the J.D. Power 5 Ps, we analyzed each brand’s performance,
compared with the other Customer Service Champions as a group, focusing more on the
specific strengths and practices that differentiate the highest-performing companies from
one another.
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© 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Achieving Excellence in Customer Service: The Brands That Deliver What U.S. Consumers Want
February 2011
Where they really stand out…
Industry
2011 Customer Service Champions
Financial
QUICKEN LOANS
Financial
UNITED COMMUNITY BANK
Healthcare
GOOD NEIGHBOR PHARMACY
Healthcare
HEALTH MART PHARMACY
Healthcare
KAISER PERMANENTE PHARMACY
Healthcare
PUBLIX PHARMACY
Healthcare
VETERAN’S ADMIN. MAIL-ORDER PHARMACY
Healthcare
WEGMANS PHARMACY
Healthcare
WINN-DIXIE PHARMACY
Insurance
AMICA MUTUAL
Insurance
AUTO-OWNERS INSURANCE
Insurance
ERIE INSURANCE
Insurance
NJ MANUFACTURERS INSURANCE
Insurance
TENNESSEE FARM BUREAU INSURANCE
Insurance
USAA
Retail
BASS PRO SHOPS
Retail
CABELA’S
Retail
CARIBOU COFFEE COMPANY
Retail
EDDIE BAUER
Retail
ZAPPOS
Product
CADILLAC
Product
JAGUAR
Product
LEXUS
Product
LINCOLN
Product
MERCEDES-BENZ
Product
SHEA HOMES
Telecom
SPRINT NEXTEL
Telecom
TDS TELECOM
Telecom
T-MOBILE
Telecom
U.S. CELLULAR
Telecom
WOW! TELECOM
Travel
ENTERPRISE RENT-A-CAR
Travel
FOUR SEASONS HOTELS AND RESORTS
Travel
INDIANAPOLIS INTERNATIONAL AIRPORT
Travel
JETBLUE AIRWAYS
Travel
SOUTHWEST AIRLINES
Travel
THE RITZ-CARLTON
Travel
WESTJET
Utilities
CLARK PUBLIC UTILITIES
Utilities
NORTHWEST NATURAL UTILITY
KEY
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People
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Presentation
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Price
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Product
Process
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Notable Strength vs. Customer Service Champion Average
Source: J.D. Power and Associates Research © 2011 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Figure 3
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